Latest news with #fixedrates
The Australian
29-05-2025
- Business
- The Australian
Interest rates, inflation: CBA slashes fixed rate as banks race to cut interest on mortgages
The Commonwealth Bank of Australia has announced on Thursday it will slash fixed rate home loans by up to 0.40 percentage points across all fixed terms, but experts say it will not be enough to get Aussies to lock in. The change will be in place from Friday, to coincide with a 0.25 cut in CBA's variable rate following the RBA cash rate cut earlier this month. CBA's new lowest fixed rate will be 5.49 per cent for three years. CBA to cut rates, experts say it's not enough. Picture: NewsWire / Luis Enrique Ascui However, ANZ will retain the lowest one and two-year fixed rates among the big four banks. National Australia Bank will also keep their crown of having the lowest three, four, and five-year fixed rates. data insights director Sally Tindall said while CBA's rate cuts bring it closer to its competitors, they're unlikely to send customers rushing to move their business. 'Fixed rates have been falling fairly consistently this year and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,' Ms Tindall said. 'CBA's fixed rate cuts aren't groundbreaking, but rather a bid to inch closer to its key competitors.' The move comes as all five major banks cut fixed rates after the RBA's decision earlier this month. Picture: NewsWire / Gaye Gerard Ms Tindall said the announced rate cuts also may not be enough to incentivise Aussies to lock into fixed rate home loans straight away. 'With just a 0.10 percentage point difference (between variable and fixed interest rates), and the possibility of further RBA cuts ramping up, it's hard to see many people jumping at the chance to lock up their mortgage for the next three years,' she said. 'We expect banks big and small will continue cutting fixed rates over the next few months. 'The majors might have to offer a fixed rate in the '4's' if they're serious about getting people to lock in their rate. Borrowers may need more incentive to Picture: NCA NewsWire / Luis Enrique Ascui 'If you're deciding between a fixed or variable rate, understand what might suit your finances and to some extent, your personality. When you make a decision, take the time to look for a competitive rate.' Five major lenders, excluding CBA, have cut fixed rates since the RBA's decision, while 20 lenders have already cut one fixed rate this month, rate tracking shows. A total of four lenders – BOQ, Community First Bank, Police Bank and Queensland Country Bank – are now offering at least one rate under 5 per cent at 4.99 per cent. Read related topics: Commonwealth Bank Of Australia Summer Liu Cadet Summer Liu started out in the legal and policy space, before taking on external stakeholder and media engagement roles. She is now a journalist with News Corp Australia's 2025 Editorial Cadet Program. Summer Liu
News.com.au
29-05-2025
- Business
- News.com.au
Banks go to war over Aussie homeowners
Australia's biggest lender Commonwealth Bank has committed to slashing its fixed rates, alongside its variable interest rate offerings in another big boost to homeowners. On the back of successive RBA rate cuts, the Commonwealth Bank has announced it will cut its fixed interest rate home loans on Friday by up to 0.40 percentage points across all fixed terms. That move comes at the same time CBA is trimming its variable mortgages by 0.25 percentage points following the Reserve Bank of Australia's decision to drop the cash rate by 25 basis points to 3.85 per cent on May 20. The CBA move mirrors that of its big four counterparts in Westpac, NAB and ANZ in offering cut price rates to customers and prospective clients. ANZ currently has the lowest one and two year fixed rates among the big four, according to Canstar. While NAB has the lowest three, four and five year fixed rates. The latest moves could give rise to an interest rate war between Australia's biggest lenders as they amp up competition for market share amid shifting mortgage conditions, These are fixed rates for owner-occupiers who are paying off principal and interest. According to tracking, four lenders – BOQ, Community First Bank, Police Bank and Queensland Country Bank – are now offering at least one rate under 5 per cent at 4.99 per cent. Bank Australia also has a green home loan at 4.94 per cent. data insights director, Sally Tindall said she expects mortgage rates will continue to fall, a huge boon to homeowners enduring the cost of living crisis. 'Fixed rates have been falling fairly consistently this year and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,' she said. 'CBA's fixed rate cuts aren't groundbreaking, but rather a bid to inch closer to its key competitors. 'From tomorrow, the bank's lowest variable rate will be sitting at 5.59 per cent, while its lowest fixed rate will be 5.49 per cent. With just a 0.10 percentage point difference, and the possibility of further RBA cuts ramping up, it's hard to see many people jumping at the chance to lock up their mortgage for the next three years. 'We expect banks big and small will continue cutting fixed rates over the next few months. 'We've already got four lenders with at least one fixed rate under 5 per cent, however, this could well become the norm for banks by the end of the year. 'The majors might have to offer a fixed rate in the '4's' if they're serious about getting people to lock in their rate.' However the current situation might not be enough for homeowners to start feeling some relief with Stephen Koukoulas – regarded by The Australian Financial Review – as one of Australia's most influential economists – saying struggling Aussies need more. 'People are still not changing the way they spend,' Koukoulas, who is a former senior economic adviser to the Prime Minister's Office, told Mark Bouris' Yellow Brick Road podcast. 'We need to see three or four rate changes before we see a real change from interest rate relief.' Koukoulas said the vast majority of Aussies are still battling with financial concerns despite overall improvements in the economy, including a reduction in inflation. 'Interest rates are still very restrictive on the economy,' he said. 'They are still causing financial stress through the cost of living issue. Inflation has fallen but cost of living is still very much about mortgage serviceability. '[Worries about] cost of living are not gone, it is still bad.'
News.com.au
29-05-2025
- Business
- News.com.au
Major Aussie banks to slash home loan rates
The Commonwealth Bank of Australia has announced on Thursday it will slash fixed rate home loans by up to 0.40 percentage points across all fixed terms, but experts say it will not be enough to get Aussies to lock in. The change will be in place from Friday, to coincide with a 0.25 cut in CBA's variable rate following the RBA cash rate cut earlier this month. CBA's new lowest fixed rate will be 5.49 per cent for three years. However, ANZ will retain the lowest one and two-year fixed rates among the big four banks. National Australia Bank will also keep their crown of having the lowest three, four, and five-year fixed rates. data insights director Sally Tindall said while CBA's rate cuts bring it closer to its competitors, they're unlikely to send customers rushing to move their business. 'Fixed rates have been falling fairly consistently this year and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,' Ms Tindall said. 'CBA's fixed rate cuts aren't groundbreaking, but rather a bid to inch closer to its key competitors.' Ms Tindall said the announced rate cuts also may not be enough to incentivise Aussies to lock into fixed rate home loans straight away. 'With just a 0.10 percentage point difference (between variable and fixed interest rates), and the possibility of further RBA cuts ramping up, it's hard to see many people jumping at the chance to lock up their mortgage for the next three years,' she said. 'We expect banks big and small will continue cutting fixed rates over the next few months. 'The majors might have to offer a fixed rate in the '4's' if they're serious about getting people to lock in their rate. 'If you're deciding between a fixed or variable rate, understand what might suit your finances and to some extent, your personality. When you make a decision, take the time to look for a competitive rate.' Five major lenders, excluding CBA, have cut fixed rates since the RBA's decision, while 20 lenders have already cut one fixed rate this month, rate tracking shows. A total of four lenders – BOQ, Community First Bank, Police Bank and Queensland Country Bank – are now offering at least one rate under 5 per cent at 4.99 per cent.
Bloomberg
23-05-2025
- Business
- Bloomberg
Tariff Story Far From Over: BofA's Khoda
Bank of America Securities Head of US Credit Strategy Neha Khoda says investors should stay nimble, go back and forth between fixed and floating rates, look at dislocations of ratings, sectors and asset classes. She speaks with Vonnie Quinn on 'Real Yield.' (Source: Bloomberg)
News.com.au
09-05-2025
- Business
- News.com.au
Banks in rate cut war to woo borrowers ahead of RBA meeting
Another big four bank has taken the axe to its fixed rate home loans, cutting by up to nearly half per cent just 11 days out from the next RBA meeting. In a bid to woo borrowers, ANZ has slashed fixed rates by up to 0.4 percentage points for owner-occupiers, and up to 0.45 percentage points for investors. That takes the bank's lowest fixed rate to 5.39 per cent — the lowest two-year fixed rate of the big four banks. NAB has the lowest three, four, and five-year fixed rates, after cutting a month ago. BOQ and Police Bank have the lowest fixed rates on the market at 4.99 per cent. It follows in the footsteps of NAB reducing its fixed rate on April 11 and Macquarie Bank on April 24. The RBA is widely expected to cut the official cash rate by as much as 50 basis points when it meets again on May 20. State's 15 'supercharged' investor markets revealed data insights director Sally Tindall said the fixed rate mortgage market was finally heating up, with a number of cuts in the past month from big and smaller lenders. 'The bank has one eye on the possibility of cash rate cuts, potentially as soon as 20 May, and another on locking new customers in, using a relatively competitive fixed rate as the hook,' Ms Tindall said. 'While a rate of 5.39 per cent isn't likely to turn many heads, with variable borrowers across the country hanging out for further cash rate cuts, a fixed rate of 4.99 per cent might grab attention.' But it's not just fixed rates that are being cut. The Commonwealth Bank this week dropped its digital variable interest rate to 5.84 per cent — on par with Westpac and ANZ, with only NAB having 6.19 per cent as its lowest. Ms Tindall said a mortgage rate starting with a '4' was a crucial threshold psychologically that could prompt some borrowers to change from a variable rate. 'If you are weighing up the option of fixed versus variable, understand what might suit your finances better and make sure you spend time shopping around for a competitive deal,' she said 'Ultimately, this rate slashing is good news for borrowers. Two of the big four banks have cut fixed rates within a month of each other and we expect more banks to follow suit, however, lenders will probably have to consider fixed rates in the '4's if they want to get traction.' Deloitte Access Economics head Pradeep Philip said the latest inflation data for the March quarter left the door open for the RBA to cut rates this month. 'A May rate cut should not be viewed as the RBA declaring 'mission accomplished' in the fight against inflation,' Mr Philip said. 'Instead, it should be viewed as insurance against any collateral damage a trade war and geopolitical turbulence may cause the Australian economy.' Deloitte Access Economics is forecasting a 50 basis point cut on May 20 followed by another 25 basis point cut this year, which would see the cash rate reduced by 100 basis points including the February cut. Compare the Market economic director David Koch said another rate cut on May 20 would be 'much-needed relief for homeowners buckling under the pressure of expensive loans and high interest rates'. Mr Koch said it was unlikely interest rates would ever be as low as they were during the pandemic, but they should not be as high as they were now. 'Australian homeowners have worn the brunt of the war against inflation,' he said. 'It's high time we had some relief.'
